) reported second-quarter 2013 earnings of 43 cents per share,
beating the Zacks Consensus Estimate of 33 cents. Adjusted
earnings per share exclude one-time items but include stock-based
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Revenues of $428.9 million were up 53.0% sequentially but down
21.8% year over year and slightly above management's guidance of
$380.0-$420.0 million due to improving demand.
Around 68.0% of revenues in the quarter came from semiconductor
testing platforms, 23.1% from system testing and the remaining
8.9% from the LitePoint wireless testing business.
Total bookings in the quarter amounted to $474.0 million, of
which $362.0 million were in Semiconductor Test, $87.0 million in
Wireless Test and $25.0 million in the Systems Test Group.
Total orders were up 18.5% sequentially, driven by a 40% increase
in Semiconductor Test orders.
Reported gross margin for the quarter was 56.2%, up 150 basis
points (bps) sequentially but down 20 bps year over year. Higher
volumes led to sequential gross margin expansion in the quarter.
Operating expenses of $137.0 million were down 2.1% from $139.9
million in the year-ago quarter. The reported operating margin
was 20.0%, down 870 bps from 28.7% in the year-ago quarter. Both
engineering and development (E&D) expenses and selling and
administrative (S&A) expenses increased as a percentage of
The quarter's GAAP net income was $66.6 million or earnings per
share of 28 cents, down from a net income of $111.4 million or 49
cents in the comparable quarter last year. Excluding special
items but including stock-based compensation expense, non-GAAP
net income was $89.1 million or 43 cents per share compared with
$156.3 million or 77 cents a share in the year-ago quarter.
The company ended the second quarter with cash and cash
equivalents and marketable securities balance of $728.7 million,
down from $770.0 million in the prior quarter. Trade receivables
were $228.2 million, up from $166.6 million in the prior quarter.
Cash flow from operations was $105.5 million versus $102.1
million in the year-ago quarter. Capex was $28.3 million versus
$22.5 million in the year-ago quarter.
Management also provided guidance for the third quarter of 2013.
Revenues are expected to come in the range of $425-$465 million,
up 3.7% sequentially at the mid-point. Non-GAAP earnings from
continuing operations are expected to be 39 to 49 cents a share
and GAAP earnings per share are expected to be 23 to 31 cents per
Teradyne is a leading provider of automated test equipment. The
company reported a good quarter, with earnings beating the Zacks
The company reported higher orders and provided modest third
quarter revenue guidance, indicating macro visibility and
improved demand for Teradyne products in the future.
We also believe the addition of LitePoint is a big positive going
forward, given the significant opportunities unfolding in the
high-growth wireless market. We remain optimistic about Teradyne
in the longer term, given the popularity of its products; the
LitePoint acquisition that further rounds out its portfolio and
continuous design win momentum.
Currently, Teradyne has a Zacks Rank #3 (Hold). Investors can
also consider some other stocks with positive Zacks Rank and
expected surprise prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), Earnings ESP of +8.33% and a Zacks Rank #2 (Buy)
), Earnings ESP of +1.96% and a Zacks Rank #2 (Buy)
Scientific Games Corporation
), with an ESP of +100.0% and a Zacks Rank #3 (Hold)